Japan's wheat production declines, import demand rises
As the largest wheat importer in Asia, Japan may increase its wheat imports this fiscal year, because rainy weather has reduced domestic production while demand is rising steadily.
ShiraraShiokawa, an official with Japan's Ministry of Agriculture, said the government is currently considering raising the planned wheat import volume for 2009/10 (April to March of the following year), originally set at 4.91 million tons, because rainfall may reduce wheat production in Hokkaido.
Increased Japanese wheat imports may help the price of soft red winter wheat on the Chicago Board of Trade (CBOT) continue to rise. In March this year, the Japanese government raised the wheat import plan figure for this fiscal year by 1%, the highest level in three years, because the government forecast higher domestic wheat demand while production would remain stable.
In April this year, the Ministry of Agriculture lowered the price of imported wheat sold to flour millers by 14.8%, the first cut since 2006; as a result, Japanese wheat product sales began to increase from May.
Shiokawa said we may lower the wheat price again in October this year. The Ministry of Agriculture controls wheat imports and domestic wheat sales, and assesses the price sold to flour millers twice a year.
Shiokawa said the scale of additional wheat imports will depend on the domestic wheat harvest.
About 90% of Japan's wheat demand is met by imports.
In March, Japan's Ministry of Agriculture had forecast domestic wheat production at 830,000 tons, unchanged from the previous year. Last year, Hokkaido's wheat production was 545,100 tons, accounting for 65% of the country's total wheat production.
Affected by El Nino weather, this summer's weather was cold and rainy, which affected Japan's agricultural production. This year, Japan's rice production may fall 6.9%, the lowest level in six years, due to lower yields.
In the 12 months ending June 30, 2008, Japan's rice consumption grew 2%, reaching 8.55 million tons.